EAT upholds appeal against £110,000 costs order (Herry v Dudley Metropolitan Borough Council UKEAT 0069/19/0706)
In the case of Herry v Dudley Metropolitan Borough Council UKEAT 0069/19/0706 , the Employment Appeal Tribunal (the ‘EAT”) held that the Employment Tribunal (the ‘ET’) had been correct in dismissing the Claimant’s disability discrimination claims but upheld his appeal against a costs order for the entirety of the Respondent’s costs.
The facts in Herry v Dudley Metropolitan Borough Council
Mr Herry (the ‘Claimant’), a design and technology teacher, was off work for over three years. In the latter stages of his absence, he had sickness certificates referring to ‘stress at work’, ‘work-related stress’ and ‘stress and anxiety’. An occupational health report stated that Mr Herry took no medication for his stress, was physically and mentally fit for work and that from a medical point of view he could return to work as soon as possible. However, it also stated that there were ‘still outstanding management (non-medical) issues at the workplace’ that were causing the Claimant’s stress. A further medical certificate stated that Mr Herry felt ‘the behaviour of certain individuals [is] what is stopping him from returning to work at the school and causing his stress’. However, there was no medical evidence that stress had any effect on his ability to carry out day-to-day activities, other than occasionally to exacerbate his dyslexia.
The Claimant brought proceedings against Dudley Metropolitan Council (the ‘Respondent’) for disability discrimination. He made more than 90 allegations covering a period of more than four years.
The relevant law
In order for a Claimant to establish that they have a disability within the meaning of Section 6 of the Equality Act 2010, they must show they have a physical or mental impairment that has an adverse effect on their ability to carry out normal day-to-day activities which is substantial and long-term.
The decision of the Employment Tribunal
The Claimant’s claim for disability discrimination at the ET failed because it was held that he did not have a disability. In holding that there was no disability, the ET found that although the Claimant had been off work for a very lengthy period with the reason given as stress, he had put before the ET little or no evidence that his stress had any effect on his ability to carry out normal day to day activities.
The ET hearing lasted 39 days. The reasons given by the ET for their decision ran to some 317 pages. The Respondent brought an application for costs. The ET held that the threshold for an award of costs had been crossed as the Claimant had acted unreasonably throughout in both bringing and conducting the proceedings. The ET, having decided to take account of the Claimant’s ability to pay and having found that he had little or no money, considered that he would have the future earning capacity to enable him to pay a costs order of £110,000 which covered the Respondent’s costs in their entirety. The Claimant appealed the costs order.
The decision of the Employment Appeal Tribunal
In relation to disability, the Claimant appealed on the basis that his long-term absence, supported by sickness certificates, showed that there was a long-term adverse effect on his day-to-day activities. The EAT held that, having presented little or no evidence that his stress had any impact on normal day-to-day activities, the ET had been entitled to find that any stress was distinct from a mental impairment amounting to a disability. In coming to their decision, the EAT referred to J v DLA Piper UK  ICR 1052 which distinguished between two states of affairs which can produce broadly similar symptoms of low mood and anxiety. The first described depression as a ‘mental illness’ or ‘clinical depression,’ which is an impairment under the Equality Act 2010. The second, according to the EAT ‘is not characterised as a mental condition at all but simply as a reaction to adverse circumstances such as problems at work’.
In relation to costs, the EAT held that the ET’s reasoning provided a proper foundation and explanation for its award of the whole of the costs. The ET was not required to take account of the paying party’s ability to pay but has an open discretion whether to do so. However, if it is asked to take account of ability to pay and declines to do so, it should explain its reasons for so doing. If the ET decides to take account of the paying party’s ability to pay, its task will be to make an assessment of the paying party’s means and reflect those means in its assessment of the amount the paying party should pay. It is, however, not limited to an assessment of the paying party’s current means; it may have regard to the prospect that these means may improve.
However, in this case, the ET had not given sufficient or adequate reasons for not having considered whether it ought to have awarded a proportion of the costs or capped the costs, having regard to the Claimant’s ability to pay.
Accordingly, the EAT upheld Mr Herry’s second ground of appeal. It found that, having decided to take account his ability to pay and having found that he was impecunious, the ET had not sufficiently explained why it considered that its award was reasonable and proportionate. It had not properly explained why it considered that Mr Herry would have the future earning capacity to pay a costs judgment of more than £100,000 and did not explain why it had not considered ordering a proportion of the costs, or a capped amount of costs, taking account of Mr Herry’s ability to pay.
Our solicitors’ views on the case of Mr Herry v Dudley Metropolitan Borough Council
Sacha Barrett, a Senior Associate in the employment department at Redmans, made the following comments on the case: “It is not uncommon for employees to bring a disability discrimination claim relating to stress they have suffered due to difficulties at work. In this case the ET and EAT followed already established principles and highlighted the importance of a Claimant being able to establish their condition has had a substantial long-term effect on their ability to carry out day-to-day activities and providing evidence to support this. It also reaffirms that the cause of the condition is irrelevant.’
The decision of the Employment Appeal Tribunal in UKEAT 0069/19/0706 can be found here.